An Ontario hay marketing firm is looking to western Canadian farmers to help it meet strong export demand.
Officials from Canada Forage and Hay Ltd. will be in the West over the next few weeks scouting sources of high quality hay for shipment to the United States and for processing into compressed bales for overseas.
Company president Scott Piggot, who farms near Woodstock, Ont., about 140 kilometres west of Toronto, said he hopes about half the company’s hay supplies will come from Western Canada this year.
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Western hay is ideal for compressing and shipping overseas because of its lower moisture content.
“We can get high feed values in Ontario but moisture is always an issue because of the high humidity,” he said.
Fifteen percent moisture is considered good in the east, but western hay can be baled at 10 or 12 percent.
“That’s unheard of here,” he said.
The company’s first western foray last year generated only 20,000 acres of contracted production. This year it wants 150,000 acres.
The company has two distinct markets: marketing hay, which is shipped directly from the suppliers’ farm to U.S. customers in the form of bales; and processing hay, which is compressed at the company’s plant and shipped to the U.S. and overseas markets such as the United Kingdom, Saudi Arabia, Dubai and Greece.
For marketing hay, the company charges farmers an up-front handling fee of $7 to $12 an acre. In return it finds customers in the U.S., arranges trucking and handles the paperwork.
The company doesn’t take a margin because it’s a bonus to the main business of selling compressed hay to U.S. buyers.
“We don’t make any money on the marketing hay, but I’m not worried about that because it will pay off down the road in good customer relations,” Piggot said.
The company buys processing hay and ships it to its compressing plant in southern Ontario.
The price depends on quality, ranging from $3 to $5.50 US on-farm for small square bales and four to seven cents a pound for large square and round bales.
Canada Forage and Hay has been in business only a couple of years, but Piggot has been shipping hay to the U.S. for almost a decade.
It started when he was in Florida picking up boats for his brother, who operates a boat dealership in Ontario.
He saw a newspaper advertisement for hay and after a couple of phone calls learned hay was being shipped from Michigan for $8 a bale. He told the buyer he could supply it for $6 and the business has grown from there.
“Now, we can’t keep up with the demand,” but the strong Canadian dollar could force the company to abandon the U.S.
The firm ships to livestock and horse operations in Florida and other states.
